The DNA of a bacterial chromosome is localized in a compact body called the nucleoid. Bacterial nucleoids have been extensively studied, but the basis of nucleoid stabilization has remained elusive. The cytoplasm of E. coli is very concentrated in macromolecules, giving a potential for large macromolecular crowding effects. The present results suggest that crowding-enhancement of the interaction between DNA- binding proteins and the cellular DNA may provide an important stabilizing force for the compact form of DNA in the bacterial nucleoid. DNA-binding protein fractions from exponential and stationary phase cell extracts of E. coli were isolated by affinity chromatography on native DNA-cellulose. The ability of these fractions to convert DNA into a readily-sedimented form was compared in the absence or presence of added polymers. In the absence of polymers, large amounts of the proteins were required. In the presence of polyethylene glycol or polyvinylpyrrolidone, much smaller amounts of the DNA-binding proteins were required, indicating a macromolecular crowding effect from these polymers. The enhanced binding under crowded conditions appears to resolve a paradox between the cellular abundance of the DNA-binding proteins and the amounts required in earlier in vitro studies. The "histone-like" protein HU from the DNA-binding protein fraction was preferentially incorporated into the pelleted DNA in the presence of polymers. Purified HU at roughly similar amounts caused a similar conversion of DNA to a readily-sedimentable ("condensed") form. Crowding- enhancement of DNA condensation by promoting the binding of proteins to the DNA provides a model for the stabilization of systems such as the bacterial nucleoid or kinetoplast DNA.